Student Debt Reaches Record High, Could This Be the Root Cause Behind It?
After many sleepless nights finishing the insane amount of homework, frantically trying to finish your thesis, and bargaining with a battalion of professors, it’s finally time to wear the iconic black gown and toss the cap into the air.
Despite the festivities and the excitement of getting their dream jobs, the class of 2018 received the most expensive paper upon their graduation – their diploma.
Debbie Cochrane of The Institute for College Access & Success said that even though the rise in student debts has slowed in recent years due to the US government investing more in public colleges, there are still millions of students who struggle with their loans. Debbie continued that the colleges, states, and the federal government must all contribute to resolving this crisis.
A 2-Percent surge
Aside from looking for jobs and figuring out adulting, last year’s graduates are also facing more money issues compared to the older batches, with their average student loan reaching to more than $29,000.
According to the institute, 65 percent of the 2018 graduates from both public and private schools in the United States used student loans to pay for their college tuition. In the same year, the average student loan surged to 2 percent from $28,650 in 2017 to $29,200.
With this trend, it is predicted that by 2022, the remaining education debt in the US will reach up to $2 trillion since 30 percent of the borrowers are delinquent or in default.
This could even surpass credit card debts and car loans. Since the student loan has tripled in the last decade, it was said to be the second most expensive thing an individual has spent on next to buying a house.
Student debts also reflect if not worsen the reality of inequality in the country. Dreams of getting higher education have long been unfair enough for families with low and moderate-income and people of color.
Having to face discrimination, POC often finds it harder to fund their college education. According to a study by the Center for Responsible Learning, 70 percent of African-American borrowers who started college in 2003 will still be unable to pay their student debts by 2024.
American Association of University Women, meanwhile, reported that among the student borrowers, two-thirds are women, who pay their student loans slower than men because of the gender pay gap.
Female newly grads who work full time have a salary of 18 percent less than those of their male counterparts. As the years went by, this disparity widened, leading up to 20 percent after four years.
Varies in Every State
The student debt also varies in every state, with some states having twice the average student loan compared to others. The average student loan in the Northeastern and Midwestern is more than $30,000 while student borrowers from most Southwestern and Western states only have a debt averaging less than $26,000.
One good example is in Connecticut, where graduates have more than $38,000 in student loans while their peers in Utah, $19,750. Aside from student loans, an average student also struggles with credit card debts.
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